Houthi attacks add new geopolitical risk to softening container rates

For container lines, the immediate effect is uncertainty rather than a confirmed capacity shock, said analyst and SONAR data contributor Freightos (NASDAQ: CRGO). Carriers had gradually increased Asia-Europe transits through the Red Sea since June, helping expand effective vessel supply; a renewed wave of attacks could reverse that trend and support rates.

Asia-Europe Rates Still Elevated

Spot rates on Asia-Europe lanes have fallen steadily since July, driven primarily by the post-peak demand slowdown and by carriers’ gradual return to Red Sea routings. Yet prices remain well above year-ago levels: both major Asia-Europe trades were above $3,000 per FEU last week, roughly 70% higher than in October 2025.

Some carriers have already announced October general rate increases. Asia-Mediterranean spot prices rose 7% to $3,800 per FEU last week, a move that could help establish a higher benchmark ahead of annual contract negotiations.

The market’s underlying support is fragile. Lingering congestion in Northern Europe and the Far East has absorbed capacity, while a threatened German port strike that could have worsened European delays was recently averted.

Contract negotiations face uncertainty

Shippers and carriers are entering tendering season for 2027 annual contracts with conflicting signals. Carriers enter talks with rates still historically elevated, but there are reasons shippers may resist locking in current levels.

Newbuild deliveries expected next year would expand fleet capacity, while continued growth in Red Sea transits would further increase effective capacity by shortening Asia-Europe voyages. Those factors have led some shippers to expect rates to ease in 2027 and to hesitate over long-term commitments at present levels.

Trans-Pacific peak may be ending

The trans-Pacific trade has held near peak-season levels since July, supported by sustained demand and Asia congestion. But the first signs of easing are emerging: Far East-U.S West Coast rates dipped 2% to $8,150 per FEU, potentially signaling the start of a post-Golden Week decline.

The National Retail Federation’s latest U.S. import forecast points to a sharp seasonal slowdown, projecting November ocean arrivals to fall 11% month over month. Even so, full-year 2026 imports are projected to be just 1.4% above 2025 and 1.2% above 2024, approaching the record volume set in 2021.

Outlook

Rates may continue to soften through the remainder of the quarter as peak-season cargo tapers. The principal upside risk is geopolitical: A sustained Houthi campaign against Saudi targets, or renewed attacks on commercial shipping in the Red Sea, could tighten effective capacity and complicate carriers’ efforts to defend rate levels heading into 2027 contract talks.

Read more articles by Stuart Chirls here.

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